earnest money

Earnest money is a deposit made by a buyer to show serious intent to purchase a property. It demonstrates commitment and helps assure the seller that the buyer is genuine. Typically held in escrow, earnest money varies in amount and is applied toward the purchase at closing. If the deal falls through due to contingencies, the buyer may get the money back; if they back out without cause, the seller may keep it as compensation. Essentially, earnest money helps build trust and provides security for both parties during the real estate transaction.